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Moody’s Sweet: Hurricane Sandy Could Cost Economy $10 Billion a Day

Monday, 29 Oct 2012 02:24 PM

Hurricane Sandy could cost the country $10 billion a day as it roars ashore and morphs into a post-tropical monster packing a windy, wavy and wintry wallop across the eastern seaboard, said Ryan Sweet, a senior economist at Moody’s Analytics.

The storm will affect some 60 million Americans, inflicting damage in the form of a storm surge, high winds, driving rains and winter weather as well once it moves inland and combines with other storms systems, exploding into a meteorological and economic catastrophe.

Closed businesses will cut into economic growth, and while the damage will be large, it might not affect the country’s fourth-quarter gross domestic product as a whole.

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

“It’s much more a regional story … [Sandy] will not have significant U.S. macro economic implications,” Sweet told Yahoo, adding that lost economic output between Washington, D.C., and New York City would equal at least $10 billion a day.

Storms often spur demand for construction afterward as communities rebuild, plus some areas of the economy benefit as people stock up on food, water, batteries and other items to ride out the storm, offsetting the widespread negative consequences.

“This will show up in increased spending at hardware and home stores,” Diane Swonk, chief economist at Mesirow Financial, wrote in a recent note, Yahoo reported.

“There should also be an increase in spending, once damages from the storm are assessed and repairs get under way. That spending could borrow a bit from traditional holiday sales, depending on how much insurance is paid on those claims.”

Expect gasoline prices to spike afterward, as refineries in the eastern United States have closed to prepare for the storm.

Ongoing production issues in Europe will block the United States from looking across the Atlantic for extra supplies to make up for the difference, as was the case when Hurricane Katrina struck the U.S. gulf coast in 2005, according to CNNMoney.

“We don’t have the fallback we had during Hurricane Katrina,” Stephen Schork, editor of The Schork Report, a research letter on the energy markets, told CNNMoney.

“If we see a one-week delay in output, the good times might be over.”

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

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Hurricane Sandy could cost the country $10 billion a day as it roars ashore and morphs into a post-tropical monster packing a windy, wavy and wintry wallop across the eastern seaboard, said Ryan Sweet, a senior economist at Moody’s Analytics.
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2012-24-29
Monday, 29 Oct 2012 02:24 PM
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